KASAI KOGYO CO .,LTD. (7256) Stock Price

Kawanishi Industrial is a corporate group primarily engaged in the manufacturing and sales of automotive interior components. The company produces interior parts such as ceiling materials and trim panels at domestic and overseas facilities, supplying components to automotive manufacturers.

Its main customers are automotive manufacturers, primarily Japanese-affiliated companies. The company generates revenue through global sales from production bases in North America, Mexico, Europe, and Asia. The company operates a supply chain in which it receives components from its parent company, subsidiaries manufacture these components, and the majority are then delivered to customers through the company.

The business operates as a single segment focused on automotive interior components. Domestically, the company holds subsidiaries engaged in ceiling material manufacturing, design development, insurance agency services, and contract manufacturing. Overseas, local subsidiaries in North America, Europe, and Asia conduct production and sales for local vehicle manufacturers. The company's related company in Germany will be divested as of March 31, 2025.

The company announced its medium-term management plan "Kasai Turnaround Aspiration (KTA)" in April 2025, targeting fiscal year 2027 as the final year to rebuild its management foundation and return to a growth trajectory. Specifically, through structural reforms centered on North American operations, the company aims to increase its operating profit margin to 4–5% by fiscal year 2027. For near-term performance, the company projects consolidated net sales of 200 billion yen (200,000 million yen) and operating profit of 3.5 billion yen (3,500 million yen) for the fiscal year ending March 2026. The company also prioritizes improving cash generation by enhancing sales collection and inventory management, with a focus on shortening the period from sales to cash conversion to increase available funds.

The company's priority investment areas are higher value-added interior trim products for automobiles and improved production efficiency. Specific initiatives include strengthening the development structure to handle planning, design, prototyping, and mass production in an integrated manner, and reducing costs through process standardization across global production facilities. The company is also shifting management resources toward new business creation and technological innovation investments, while strengthening human capital including talent development. Additionally, Nissan Motor completed its preferred stock subscription in November 2024, and the appointment of Nissan directors has strengthened manufacturing and North American operations management, supporting the company's turnaround efforts in the region.

For market development and business restructuring, the company plans to strengthen local supply capabilities in growth markets using its existing North American, Mexican, European, and Asian production and sales networks as a foundation. Specifically, the company is advancing local development and production in China and Asia, while optimizing its portfolio by withdrawing from and restructuring unprofitable operations and facilities. The company has already sold its German affiliate as of March 31, 2025. In markets where the company has not yet entered, it is expanding its sales network through technical support contracts with local parts suppliers, while maintaining supply systems that follow major automotive customers' local production.

Regarding technological innovation, the company is pursuing "the creation of comfortable mobility spaces" and advancing technology development to enhance interior performance in areas such as sound, texture, and weight reduction. Based on its innovation development roadmap, the company aims to provide high-value-added products suited for next-generation vehicles, including electric vehicles, by advancing materials and molding technologies and strengthening coordination between design and production. Additionally, through expanded R&D investment and human capital investment, the company is accelerating the creation of new products and businesses to drive long-term corporate value enhancement.